Trafigura, Plains All-American team to send Permian crude overseas

Under the agreement, which took effect immediately, Trafigura can receive up to 100,000 barrels of product at the terminal it co-owns with Buckeye Partners LP.

Under the agreement, which took effect immediately, Trafigura can receive up to 100,000 barrels of product at the terminal it co-owns with Buckeye Partners LP.

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Under the agreement, which took effect immediately, Trafigura can receive up to 100,000 barrels of product at the terminal it co-owns with Buckeye Partners LP.

Under the agreement, which took effect immediately, Trafigura can receive up to 100,000 barrels of product at the terminal it co-owns with Buckeye Partners LP.

Trafigura, Plains All-American team to send Permian crude overseas

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Permian Basin operators, already the focus of global attention for their success in producing crude and natural gas, will be sending increasing amounts of their production overseas.

Trafigura Trading LLC and Plains All-American Pipeline LP have announced a long-term agreement that will allow Trafigura to buy crude oil and condensate from the Permian Basin and receive it at its condensate splitters and export terminal in Corpus Christi.

Under the agreement, which took effect immediately, Trafigura can receive up to 100,000 barrels of product per day at the terminal it co-owns with Buckeye Partners LP.

A spokeswoman for Trafigura said in an email that there is strong demand in Asia, especially China, for the light sweet crude coming out of the nation’s shale plays, particularly the Permian Basin.

She said the agreement will offer Permian Basin producers a wide and steady customer base and a better net-back.

Any time Permian Basin operators have the opportunity to send their crude to new markets, it not only helps diversify their base but offers the opportunity to narrow the price differential between West Texas Intermediate-Midland and West Texas Intermediate Cushing, said Danny Campbell, president of Henry Resources.

“The more ways we can get crude out of the Permian Basin, the better chance we have to keep the differential close to Cushing,” he said.

Campbell added that the growth in exports of domestic crude improves efficiency in the process. Sending tankers of the light sweet crude coming from the Permian’s shale plays to refineries set up to process it while bringing in the heavier crudes to U.S. refineries that have long been set up to process them is more efficient and a “win-win” situation for producers, refiners and consumers, he said.

Trafigura, a wholly owned subsidiary of Trafigura Group Pte Ltd -- which was founded in 1993 as a physical commodities trading group -- opened an office in the Bank of America building in downtown Midland last spring.

“Trafigura already has a leading role in exporting crude oil and refined products from the U.S.,” Kevin Jebbitt, co-head of crude oil trading at Trafigura, said in a statement announcing the agreement. “Today’s agreement will connect producers in the Permian Basin to our significant logistics infrastructure, global customer base and marketing power on a long term basis.”